WEEKLY REVIEW

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00875R001000020004-1
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 30
• Document Creation Date: December 22, 2016
• Document Release Date: May 7, 2009
• Sequence Number: 4
• Publication Date: January 25, 1974
• Content Type: REPORT

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Referral Review by NGA
State Dept. review completed.
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The WEEKLY REVIEW, issued every Friday morning by the
Office of Current Intelligence, reports and analyzes signif-
icant developments of the week through noon on Thursday.
It frequently includes material coordinated with or prepared
by the Office of Economic Research, the, Office of Strategic
Research, and the Directorate of Science and Technology.
Topics requiring more comprehensive treatment and there-
fore published separately as Special Reports are listed in the
contents.
CONTENTS (January 25, 1974)
1 The Middle East
6 International Monetary Developments
8 China Takes the Paracols
EAST ASIA
PACIFIC
10 Korea: Watchful Waiting
11 Cambodia: Government Gains
13 Laos: Hope Springs Eternal
18 Belgiutii: Government Crisis
19 France Proposes Energy Talk;
at UN
20 USSR-China: Expulsion and Retaliation
21 Yugoslovia: Third World; Energy
MIDDLE EAST
AFRICA
24 India: New Uncertainties
WESTERN
HEMISPHERE
26 Cuba: Expanding the Oil Industry
27 Argentina: Terrorists Sot Back
27 Bolivia: Banzer's Problems
28 Costa Rica: The Election Campaign
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THE MIDDLE EAST
Breakthrough on Disengagement
Israeli forces began moving off the Suez
Canal's west bank this we...: in implementation of
t:,e Egyptian-Israeli disengagement agreement
signed on January 18. During the 40-day dis-
engagement period, the UN Emergency Force will
establish a buffer zone seveira! miles wide inside
the Sinai Peninsula, to be flanked on each side by
"security zones" for limited and lightly armed
Egyptian and Israeli forces. The Egyptian area
will be located between the canal and the UN
zone; the Israeli area, between the UN forces and
a point just wrist of the Sinai passes, thus leaving
these in the full control of Israel's main force.
the
evacuation of the west bank salient will be under-
taken in three stages, all to be completed by
February 12. The entire disengagement process is
to be completed no later than March 6. According
to the Israelis, forces deployed on the Cairo-Suez
road blocking access to the city of Suez and the
Third Army will be evacuated first, probably
within the week, and as each stage proceeds, UN
forces will move in to replace the Israelis briefly
before turning the areas back to the Egyptians.
Both sides made concessions to achieve the
agreement. By accepting limitations on its forces
and armament on the east bank, Egypt conceded
its freedom to use recaptured territory as it sees
fit. Israel, of course, has committed itself to with-
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draw from tern' iry it has occupied for years, and
it did not receive the firm assurance of an endur-
ing peace it had apparently sought as an earnest
of Egypt's sincerity in pursuing a negotiated
settlement.
Reaction to the disengagement agreement in
the Arab world has ranged from Syria's pointed
silence, through unenthusiastic acceptance by
many of the peripheral states, to the severe
opprobrium of Libya, Iraq, and the majority of
the fedayeen loaders. The reaction is chiefly based
on widespread apprehension that Egypt intends
to negotiate a unilateral settlement with Israel, in
disregard of over-all Arab interests.
Egyptian Follow-up
To counter this impression, President Sadat
launched a wide-ranging diplomatic offensive
among the Arab states immediately following the
agreement's conclusion. He made personal calls
during the week on the principal Arab leaders arid
dispatched envoys to each of the other states-
with the conspicuous oxccption of Jordan. In
these contacts, Sadat has sought to explain provi-
sions of the agreement, gain support for his nego-
tiating policy, and above all to ease the concern
that Egypt intends to abandon the Arab cause in
the interest of achieving its own settlement.
Public Egyptian commentary on the dis-
engagement agreement has similarly been
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Egyptian Chief of Staff C;amasy reviews
Israeli map of disengagement zones
carefully designed to reassure the Arabs about
Egyptian intentions. The media and official state-
ments, for instance, have repeatedly emphasized
that the agreement is a military accord only and
that a similar Syrian-Israeli disengagement should
be negotiated before the full Geneva conference
can be resumed. The Cairo media have also jabbed
at Arab dissenters, calling for continued joint
Arab action as the best assurance of progress
toward Israeli withdrawals on other fronts.
Syria has been the chief target of the Egyp-
tian efforts. Cairo can point to the disengagement
agreement to refute charges from militant Arabs
that only war can bring progress toward an Israeli
withdrawal, but without Syrian support, Sadat's
insistence that he is not pursuing solely Egyptian
interests remains suspect. Syria is a key element,
in the Egyptian view, in the continued success of
negotiations, and Sadat has made a particular
effort to convince the Syrians that he does not
intend to leave Damascus or the other Arabs
behind.
Syria's Reaction
I f anything, the Egyptian-Israeli accord
seems to have sharpened Syrian distrust of Egypt
and deepened the divisions within the Arad
regime between those opposed to negotiations
with Israel and those at least willing to explore
that path. In Damascus last weekend, Sadat en-
countered deep skepticism among Syrian leaders,
a ou airo ioncrring its commitments no o
negotiate a separate peace settlem^nt with Israel.
Asad probably still hopes to attend the Geneva
conference, but he is likely to play his cards very
cautiously, not only to drive a hard bargain but to
protect his own position.
He is unlikely to make any decision, there-
fore, on whether to turn over a POW list to Tel
Aviv-an Israeli prerequisite for holding disonyage-
mont talks-until sometime after he receives a
response to the suggestions he gave Secretary
Kissinger to pass on to Israeli leaders. Indeed, lie
may wait for Secretary Kissinger to resume the
shuttle diplomacy that brought the Egyptians and
Israelis together.
In the meantime, the Syrians reportedly in-
tend to continue shelling positions the Israelis are
fortifying along the Golan Heights cease-fire line,
but have put off indefinitely any plans they may
have had to launch large scale attacks.
Fedayeen Disarray
The leaders of all the major fedayeen organi-
zations but Fatah have criticized Egypt's willing-
ness to got ahead of the other Arab states and the
Palestinians by signing the, disengagement agree-
ment with Israel. Palestine Liberation Organiza-
tion Chairman Arafat, sensitive to the need to
cooperate with Egyot, is seeking, so far with little
success, to moderate the statement denouncing
the Egyptian initiative put out in the name of the
organization's Executive Committee while he was
in Cairo. Although he has been able to keep his
followers within Fatah in line, Arafat has only
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limited influence with the loaders of the other
fodayeon groups.
Saiqa, the Syrian-supported fodayoon organi-
zation, will be unable to approve the disengage-
ment accord or any Palestinian role in peace nego-
tiations until Damascus does. The smaller and
more radical organizations- whose policies often
parallel those of Libya and Iraq-oppose the
agreement as a soll.out of Palestinian interests.
Facing this opposition, and caught between Egypt
and Syria, Arafat is making little headway in his
efforts to load the Palestinians to the peace talks.
Israeli spokesman this week have refused to
confirm press speculation that a breakthrough is
near on possible Israui!-Syrian negotiations. In her
address to the Kna:,set, Mrs. Moir claimed that
contacts with Damascus have yielded no progress,
and Foreign Minister Eban told reporters that
talks between Tel Aviv and Damascus "had barely
entered a pro-preliminary stage." Both repeated
that Israel will not discuss a separation of forces
with Syria until it has received a list of Israeli
POWs.
Soviets Unhappy with Cairo
The Soviets are irritated because they were
largely cut out of the disengagement talks and
because the prominent, and effective, role played
by the US diminished Moscow's stature all the
more. The Soviets clearly would prefer to have all
issues discussed and resolved at Geneva, where
they have a voice. Ambassador Vinogradov, for
example, field Kuwaiti officials in Geneva, that
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Moscow disapproved of Egypt's policy of bypass-
ing the Geneva conference to hold bilateral talks.
He complained that Secretary Kissinger had not
kept Moscow Informer].
The Soviets are apparently attempting to
force the focus of the negotiating efforts back to
Genova. Fahmi's arrival in Moscow on January 21
has probably provided the Soviets an opportunity
to Impress upon Fahmi their disappointment at
having been excluded.
? Saudi Arabia, Kuwait, Abu Dhabi,
Qatar, Egypt, and Sudan formed an invest-
ment company to finance Arab agriculture
and shipping ventures;
? The Arab Bank of Jordan and a London
merchant bank established a joint venture to
assist Arab governments in channeling surplus
oil funds into large-scale development pro-
jects, such as oil refineries and manufacturing
plants;
? Kuwaiti quasi-public and professional
organizations will sponsor a seminar in Ku-
wait next month on investment of Arab sur-
plus funds;
? Twenty-five lsl:.mic nations are stopping
up preparations to establish an Islamic Devel-
opment Bank by April 1974;
? The Arab League agreed on January 23
to set up a fund to speed economic develop-
ment for African countries.
The unanswered question is how tough Mos-
cow is prepared to be with Sadat. If the issue
between the two countries is only a qu3stion of
Egypt's recognition of the proprieties, i.e., Mos-
cow's desire to be part of the action, then re-
turning the next stage of the negotiations to
Geneva should got their relations on a more even
keel. But if Moscow is determined to do what it
can to forestall closer Egyptian-US relations and a
continuing prominent US role in working toward
a peace settlement, then tougher days lie
dhead.
The Arab oil producers anticipate a $30-
billion current account surplus this year, and have
taken several preliminary steps since December to
deal with their burgeoning reserve holdings:
Page 4
These actions should markedly increase the
amount of money directed to domestic Arab
development. More Arabs will also inevitably be
involved in development administration-an im-
portant consideration in an area where foreigners
are traditionally distrusted and where lack of
trained personnel has been the greatest stumbling
block in diverting investment to domestic devel-
opment. Greeter Arab cooperation in financial
matters should also be a by-product, but because
of basic differences in investment policy, the
wealthier nations are unlikely to pool more than a
small fraction of their assets. Western capital
markets, therefore, will probably absorb the bulk
of Arab funds.
The Suez Canal Authority is ready to start
clearing the canal whenever disengagement of
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 dredging. Negotiations are in an advanced state
with a consortium of two European firms, Ulrich
Harms of West Germany and Brodospas of Yugo-
slavia, to do the heavy work of raising and clear-
ing obstacles in the canal and Its approaches.
A ship reportedly sunk by the Israelis during the June 1967 war
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Israeli and Egyptian forces is accomplished. Thu
immediate problem is clearing the canal and Its
banks of unexploded munitions and sunken
obstacles, which will probably take four to six
months. At the ;amo time, the canal will be
dredged to shape the bottom and restore it to its
pre-1967 depth. Best estimates indicate that the
dredging portion of the project will also take four
to six months. Silting, once thought to be a major
problem In clearing the canal, appears to be loss
than previously estimated.
The Egyptian Armed Forces will do most of
the work of clearing the canal area of mines and
unexploded munitions. The canal authority will
use its own personnel to do the bulk of the
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INTERNATIONAL MONETARY DEVELOPMENTS
The French decision to allow the franc to
float independently has for the moment relieved
France of the danger of incurring potentially dis-
astrous reserve losses but adds to the economic
and political disarray in the European Commu-
nities. In addition to dealing a setback to long-
established goals, such as economic and monetary
union, and possibly a regional development
policy, the action gives West Germany the un-
sought leadership of a deutschomar,k ,one and
emphasizes the growing rivalry within the com-
munity between Paris and Bonn.
In the financial markets, the French decision
created a now rush for dollars and gold.
? Gold surged to a record high of $141 as
speculation accelerated against paper curren-
cies.
? European currencies declined sharply rel-
ative to the dollar on Monday, then regained
some of the losses as speculation subsided
later in the week. The mark remained the
strongest major European currency.
? Rome is apparont'ry taking action to
maintain a stable exchange rate with the franc
at the rate it has hold since mid-December.
? Since the 'Tokyo exchange reopened
Wednesday the Japanese have sold over $700
million to hold the dollar rate at 300 yen.
Although the market calmed Thursday as a
result of now credit restrictions imposed by
Tokyo, a renewal of heavy speculation will
probably force the Japanese to lot the rate
drift down further.
Pdris' move has already resulted in a sub-
stantial do facto devaluation of the franc, which
'r3s declined 5 percent against the dollar and 4
percent relative to the mark. Thus, the float will
improve Paris' trade competitiveness, one of
France's principal goals, and protect its currency
reserves.
Protecting the joint float's parity structure-
which would have had to undergo sharp revisions
once the effects of oil price increases were
Percent Change In the Value of the US Dollar
Relative to Selected Foreign Currencies
Compared With January 2, 1073
?Ib uA nn nunnl60,. o,nl lutlmy
'?p.blr.r to le coyer cwnnci.?
known-was causing great difficulty for France.
Since last summer Paris had lost about $3 billion
in reserves in defending the franc. France also
faces a $3-billion trade deficit in 1974 compared
with a $1.5-billion surplus last year; Germany still
anticipates a surplus this year.
Paris' move also increases French flexibility
in pursuing domestic economic policy goals. Cur-
rency intervention had been reducing the French
money supply and driving interest rates up. Now
the French are free to use monetary policy-their
main economic-policy tool-to head off an eco-
nomic downturn if higher oil prices adversely
affect employment and economic growth.
In order to keep the franc from declining
drastically, Paris apparently ' red to inter-
vene in moderate amounts
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Fand has moved to 25X1
alleviate speculative pressure by tightening capital
controls.
? Tighter restrictions were placed on for-
eign lending, forward currency purchases, and
import payments to limit outward capital
flows.
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? Paris is also keeping the two-tier ex-
change market to retain greater control over
the exchange rate of the franc used in com-
mercial transactions.
The remaining members of the EC float in
effect now constitute a "deutschemark zone," in
which the mark is floating with six other cur-
rencies. For Bonn, there is little difference be-
tween this situation and Paris' controlled float.
Germany's partners, however, are unlikely to be
any more willing than the French to maintain
fixed parities within the joint float if a drain is
placed on their reserves or if exchange rates ap-
preciate too much relative to their trading
partners outside the float.
Whatever its success in meeting French
policy objectives, the independent float has killed
all hopes for movement toward monetary Union
based on the original conception-i.e., that the
EC's narrow currency band would foster harmony
in economic policy and lead to a strengthening of
community institutions. Some members of the
commission now recognize that it was a mistake
to attempt closer monetary links before estab-
lishing greater harmony in economic policy.
French Finance Minister Giscard d'Estaing has
said he will call for an EC meeting in July to
discuss economic and monetary unification. With
continuing uncertainties in the financial situation
and little chance that the EC will reach agreement
on policy harmonization by that time, the pros-
pects for a new start toward monetary unification
this summer remain bleak. Support may now be
developing within the commission for sanctioning
an independent float for all until the necessary
measures can be developed to coordinate policies
and goals.
The French move itself caught most EC
members and the commission off guard. Although
Chancellor Brandt and Finance Minister Schmidt
were quick to announce that they understood the
need for the measure, they expressed disappoint-
ment at the adverse implications for European
cooperation. The private reaction of German
officials was more critical. A high Finance Min-
istry official said that the French move repre-
sented a total disregard of community interests in
favor of a "French first" policy. He noted that, in
addition to marking the end of economic and
monetary union for the foreseeable future, the
franc float threatens a common agricultural
policy and makes settlement of the regional fund
dispute more problematic.
The French move was regarded by nearly all
the seven remaining members of the float as
symptomatic of the progressive deterioration of
the EC as a stable monetary group. A Dutch
official said the franc float had precipitated a
crisis of confidence and set in motion an "un-
raveling" process in the EC. Great Britain, on the
other hand, probably believes that the French
decision will relieve pressures on London to join
the joint float.
Senior EC Commission officials now feel it
imperative that the community move to counter
the psychological blow dealt by the French
action. They feel that the cumulative effect of the
float and the inability to proceed in other areas
has seriously deepened community malaise. The
commission intends to bring the deteriorating
state of affairs within the community to the at-
tention of the member states and ask that they
take a new look at their interests in the com-
prehensive development of the community.
The de facto creation of a deutschemark
bloc, meanwhile, will tend to polarize further a
community already badly split by self-interested
French and British actions with respect to the oil
problem. The Germans are concerned that the
weakening of the traditional Paris-Bonn axis will
thrust Germany into a position of leadership
about which Bonn still feels very unsure. Ger-
many's isolation from the major EC powers in a
fragmenting Europe is a prospect which only die-
hard opponents of the community in Bonn would
welcome.
An early test of French influence will be
provided by community preparations for the
Washington energy conference. French disregard
for
community interest
on the monetary issue
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may
make it easier for
a common position to
emerge among members opposed to Paris'
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CHINA TAKES THE PARACELS
China's foreign policy showed an unfamiliar
face this week when Peking sent troops to back
its territorial claims in the South China Sea. What
began early last week with a seemingly routine
Foreign Ministry statement reaffirming long-
standing Chinese claims to several Islands ended
with a m ini-blitzkrieg which gave China complete
control of the Paracels.
The South Vietnamese, who abandoned
their positions In the Crescent Group after only
two days of fighting, tried unsuccessfully to bring
their case before the United Nations Security
Council. Saigon lacked the necessary support to
place the item on the agenda. The Chinese had
worked to limit any diplomatic damage through
private efforts to head off a UN debate. NCNA
has also played down the whole incident. The
Chinese Foreign Ministry statement defending the
action reflects a keen sensitivity to the charge
that the incident involves a big military power
attacking a small nation. The statement highlights
the great "forbearance" of the Chinese personnel
involved and the defensive nature of Peking's re-
sponse. It also avoids gloating over the losses
inflicted upon the South Vietnamese. If China
chooses to defend its actions further it will prob-
ably emphasize that the Paracels incident does
not represent a departure from Peking's moderate
foreign policy of the past three years.
Background to the Clash
Last week's fighting grew out of long-stan.d-
ing Chinese and South Vietnamese claims to the
Paracels and the increasing importance of the
South China Sea as a potential source of oil. Both
sides have maintained a presence in some of the
Paracels since the mid-1950s. The Crescent Group
has been under the control of the South Viet-
namese who were garrisoned on Pattie Island; the
Chinese occupied the Amphitrite Group.
The Paracels have strategic as well as eco-
nomic importance for the Chinese. Some of the
islands are used as radar and weather sites, and
Page 8
their proximity to the main shipping lanes of the
South China Sea permits surveillance of ocean
traffic. Additionally, the Chinese have been build-
ing a naval facility in the Amphitrites, possibly
with a view to developing it as a forward operat-
ing base for South Sea Fleet units.
The presen'. trouble dates from a South Viet-
namese statement issued in September that rulter-
a4ed Saigon's claim to the Spratlys, another chain
at islands south of the Paracels. Peking appeared
to ignore this claim until January 11 when it
responded with a Foreign Ministry statement reaf-
firming the Chinese claim to several islands in the
Vietnam TAIWAN
1
Amphitrite
Creecenl `:o(aup
croup ''??parocel )S.
South PIIIlippiNEs
South
CRESCENT
GROUP
Pattie
Paracel
Islands
AMPHITRITE
GROUP
o? Rocky
Woody
China
Sea
1 Vuladdore Reel
0. Dl very Reel
Passu Keah 0
Triton
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0
Bombay Reel
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South China Sea, including the Spratlys and the
Paracels. For the first time, Peking also claimed
the "natural resources in the sea around" the
islands. Shortly afterwards, the Chinese appar-
ently sent some nationals to the Crescent Gioup
where they sot up huts and raised the Chinese
flag. They were then driven from the island by
South Vietnamese troops.
Prospects
The South Vietnamese obviously lack the
military strength to move back into the Paracels
even though they have threatened a counter-at-
tack if diplomatic moves failed. It is unlikely that
Peking will attempt to move into the Spratlys or
other islands in the area where the status quo has
not been disturbed and where the situation is
complicated by the presence of Philippine and
Nationalist Chinese troops.
If China must pay a diplomatic price for the
Paracels incident it will probably not be high.
Soviet media have confined themselves largely to
replays of Western cornmentaries. The Soviet For-
eign Ministry has indicated privately that the
question of owrirship of the Paracels should be
settled by the parties involved, noting that not
only Saigon and Peking but also Manila claim
them. It would appear that there is no large
Soviet propaganda campaign based on this issue in
the offing.
Hanoi has also been reticent to take a stand,
since any line the North Vietnamese take would
either offend Peking or undermine North Viet-
namese pretensions to sovereignty or both. The
Nationalists, who also claim the Paracels, have
likewise been placed in a dilemma. To support
Saigon would be to give up their own claim.
Peking as wholly culpable.
As for China's neighbors to the south, their
reactions are less clear. The facts concerning the
Paracel incident, however, are sufficiently obscure:
that it will be extremely d;fficult for them to see
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KOREA, WATCHFUL WAITING
Since Pyongyang claimed the territorial
waters surrounding South Korean - occupied
islands off the west coast seven weeks ago, both
Koreas have brought additional naval ships into
the area, but each has carefully avoided provoking
incidents. South Korean ferry and resupply ships
with naval escort continue routine trips to the
islands, ignoring Pyongyang's demand that they
obtain prior approval for transit.
Pyongyang's rationale for its action is still
not fully apparent, but it almost certainly in-
cludes the desire to establish full access to waters
within 12 miles of its coasts and to associated
airspace. In addition to conducting what have
become routine naval patrols in such waters, the
North in recent weeks has begun regular flights
over them and closer to the DMZ where its air-
craft have not operated previously.
While pressing the limits of it.; territorial
sovereignty, the North wants to avoid creating a
situation that Seoul might exploit to divert atten-
tion from its present domestic problems. Pyong-
yang has passed up several chances to raise the
territorial issue at recent meetings of the Military
Armistice Commission, thereby preventing the
South from using that forum to present the issue
more credibly to a domestic audience grown in-
creasingly skeptical of "the threat from the
North."
Nor has the North broadened its earlier
claims to include the islands themselves, although
Pyongyang undoubtedly remains interested in ne-
gotiating their status if and when the UN Com-
mand-which technically controls them-is dis-
solved. It may be significant, in this connection,
that in commenting on the current Paracel Islands
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SOUTH
0 10 20 30 4OMllos
0 10 20 30 40Kllometers
555124 1-74
KOREA
dispute, North Korea has carefully avoided draw-
ing parallels with the local situation.
At the same time, the North continues its
propaganda attacks alleging that provocative
South Korean naval and air activity off the west
coast is a tactic of the South Korean President to
justify his recent emergency decrees. Such allega-
tions, 'f course, also provide a basis for Northern
complaint or retaliatory action in the event that
an incident of some occurs
zone.
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CAMBODIA: GOVERNMENT GAINS
Cambodian Army forces this week regained
the initiative northwest of Phnom Penh's Pochen-
tong airfield as command and control problems
began cat&,ing up with the Khmer Communists'
dry-season offensive.
ommunis s had held on in the northwest for
over a week. They apparently anticipated that a
planned offensive against the capital's southern
defenses would divert government attention but
the continuing threat of Communist rocket at-
tacks, the Education Ministry temporarily closed
all universities and schools in Phnom Penh. This
move was aimed at undercutting a strike by the
city's primary and secondary school teachers,
who have been protesting the high cost of living.
when the offensive did not materia;ize, Commu-
nist resistance in the north began to wilt. The
airport is now beyond the range of Communist
mortar crews for the first time in almost two
weeks. Government troops continued mopping up
operLW5ns in the northwest late in the week and
claim co have captured significant quantities of
arms.
A sizable Communist campaign in
the south still seems likely. Barring any flare-up in
the northwestern sector, however, the govern-
ment can now safely commit more reinforce-
ments and most of its aircraft and artillery to the
defense of the southern front.
The new government headed by Prime Minis-
ter Long Boret this week exploited the military
situation for domestic political purposes. Citing
Long Boret probably also hopes that the
closing will dampen any sympathetic student re-
action to former prime minister Son Sann's recent
proposal that Lon Nol leave the country. Son
Sann presented this proposal as a way to reach an
immediate cease-fire and early negotiations. Be-
fore the schools were shut, several university stu-
dent groups had openly endorsed Sann's scenario.
One leftist student association outdid Sann by
calling for a complete change of leadership in
Phnom Penh and by supporting the Communists'
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Bangkok last week had a bad case of the
political jitters, sparked by unruly student dem-
onstrations against Japan and the US and student-
instigated law-breaking. During a recent press con-
ference, Prime Minister Sanya replied to press
criticism of the deterioration in law and order by
offering to resign if the press believed his govern-
ment was too weak.
Sanya contributed to doubts about his abil-
ity to cope with the situation-which are held by
the conservative elite, and particularly the army
officers
was
prepared to step down if the King so desired.
When the Prime Minister flew off to Chiang Mai
over the weekend to consult with the King, many
believed Sanya would return to Bangkok an orai-
nary citizen. Instead, the Prime Minister returned
to the capital armed with a tough statement link-
Prime Minister Sanya
ing the survival of his government to the passage,
of several key tax bills that the National Assem-
bly had earlier rejected. The Prime Minister
strongly implied that his challenge to the assem-
bly had the firm backing of the King. Sanya
alluded to the King's advice on the measures that
should be adopted in order to deal with the
energy crisis. He also referred to the monarch's
"interest" in recent student demonstrations-an
oblique but still clear signal to the students to get
off the streets and back into the dassrooms.
The episcde is illustrative of the new politi-
cal forces now at play in Thailand. In particular,
it points up the King's new political status and his
willingness to become deeply engaged in domestic
affairs. When student pressures threatened the
stability of the government, it was the King's
support, not the military's, that proved crucial.
For the time being, at least, army chief Krit
Sivara appears content to defer to the King's
wishes and remain on the political side-
lines.
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Negotiations on a now coalition government
may soon gather momentum. Prime Minister
Souvanna, in a private conversation with visiting
USIA Director Keogh on January 20, said he now
expects the now government to be formed early
next month. Souvanna indicated that Soth
Photrasy, chairman of the Lao Communist dologa-
tion to the Joint Central Commission to Imple-
ment the Agreement, Informed him late last weak
that chief political negotiator Phoun Siprasouth
would soon be returning to Vientiane with a list
of Pathot Lao ministers for the now government.
Phoun left Vientiane for consultations in Sam
Noua on January 16.
For weeks, the Prime Minister has been
pressing his half-brother, Lao Communist leader
Prince Souphanouvong, to submit such a roster as
a moans of helping move the negotiations off
dead cantor, but up to now those requests had
fallen on deaf oars In Sam Neua. Souvanna's now
optimism is In marked contrast to the gloom he
had exhibited in earlier discussions with senior US
officials In Vientiane.
In another encouraging development, Soviet
Ambassador Vdovin departed Vientiane January
19 for Hanoi and Sam Noua. Vdovin promised US
Ambassador Whitehouse that he would discuss US
policy objectives in Laos, Including North Viet-
namese troop withdrawals, with North Vk t-
namose and Lao Communist leaders and attempt
to convince them that Souvanna was negotiating
in good faith. Vdovin had earlier acknowledged to
the US ambassador that the Pathot Lao were
responsihio for the delay in implementing the Lao
accordh, and that he intended to do everything
possible to facilitate political n. gotiations on a
now coalition government. He also predicted that
the Pathot Lao would change their negotiating
tactics early in 1974 and agre' to begin serious
discussions on a now government. His visit to Sam
Noua marks the first time since 1969 that a Soviet
ambassador has traveled to the Lao Communist
headquarters.
Government and Lao Communist neyu-
tiators at the working level have also made limited
progress in resolving some of the difficult prob-
lems associated with the neutralization of Vien-
tiane and Luang Prabang. Both sides have agr',ed
in principle on the size. duties, and prerogatives
of the "joint protective military forces" called for
in the neutralization of the twin capitals, but
there has boan no meeting of the minds on the
question of "joint police forces" for the two
cities-a sticking point that has hamstrung delib-
erations in the Joint Central Commission for
s::ieral weeks.
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INDONESIA: THE MORNING AFTEI1
Jakarta is slowly returning to normal after
the riots last week, the worst since the overthrow
of the late president Sukarno, Official statistics
show 11 de d, 139 injured, 077 automobiles
(mostly Japanese-made) vanrtalited, and 144
buildings rfarnaged. The intensity of the violence
and the speed withwhich it spread caught security
officials by surmise; they had anticipated rela?
Lively mall, easily contained student protests,
Non-student youth were responsible for
most of the violence and vandalism, but the gov-
ernment now believes that its tolerance of student
Protesters created a climate of permissiveness that
contributed to the rioting. The government has
decided therefore to crack down on all dissent-
ers-175 persons have clready been detained, in-
cluding many students and intellectuals. Campus
political activity is banned, and six newspapers
have been closed tempor-Icily.
Jakarta students are quiet for the moment.
Stunned by the violence spawned by their demon.
strations, but the government fears that students
in other cities may see the riots as an exhibition
of student power and try to further the cause.
The press reported on January 21 that some
1,000 university students gathered in tlandung,
West Java, to protest new government strictures
on campus political activity. The local security
chief subsequently imposed censorship on all
local newspapers "to ensure security and order."
Authorities in Surabaya, East Java, are worried
about student threats against local Chinese-owned
nightclubs and massage Harlots unless they are
Closed down. They believe the situation in the
city is still tense and that a small spark could
trigger anti-Chinese rioting there,
The government is making appropriate
noises about the validity of some student criti?
cis", particularly regarding corruption and Indo?
nesia's dependence on foreign money, but offl
cials have made it clear that the government and
not the students will decide what change: are
needed. Major reforms that threaten the interests
of important members of the ruling elite are un-
likely, but the government has announced some
measures to meet popular grievances. Guidelines
are being issued to curtail the lavish lifestyle of
government officials. The government has also
promised a new policy on foreign investment to
encourage projects that benefit indigenous busi-
nessmen. In addition, one of the President's ad-
visors, bitterly attacked by the students as Japan's
broker in the government, may soon be eased
out- oster-sibly for reasons of failing health.
It is not yet clear how the fallout from the
riots will affect the budding student movement.
The violence was a sobering experience for sto-
dent leaders, but it also graphically demonstrated
the validity of their original assessment of latent
popular discontent. The tough new government
measures against political activity will provide all
acid test of the students' commitment to their
cause.
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BELGIUM: GOVERNMENT CfaISIS
demands, Tindernans was apparently hoping to
(title off Cooperation ors the refinery agreement
for now CUr1CeSSIUns oil iSSUeS sensitive to I`lettl?
ish-speaking areas,
I f another government cannot be patched
together, the King will dissolve parliament and
new elections will be held within 40 days. ' year
ago when elections were unpalatable to the major
parties, it took 65 days to hatntner out a coali-
tion. This tittle, the Socialists appear to welcome
elections, which they believe will improve their
parliamentary position. They have already do-
clared that they will nr:t participate in 6 new
coalition unless the government is given the right
to intervene in state energy matters.
Leaders of the Social Christian and Liberal
parties also sense that the Socialists are in a strong
bargaining position. They are likely to stall elec-
tions as long as possible in order to draw atten-
tion away from the energy-related lbramco
Premier EdmonJ Leburton. flanked by cabinet mcmbcrs, announces his resignation
Page 18 WEEKLY REVIEW
Pritne Minister Lebu: ton's coalitio; of So-
cialists, Social Christians. Ind Liberals missed
celebrating its first annivar,aty by one week when
it resigned ors .ran;taiy 19. The immediate cause
of the government's collap 14, was Iran's cancella-
tion of the 1+200'n,illion joint petroleum refinery
(lbrat .o), which ILAbutton and his Socialist Party
have strongly supported. The root cause of tiel'
giunt's political instability, however, is the old
bugbear of regional strife between the I'lemish
speakers in the north and the french-speaking
Walloons in the south.
The refinery was slatei for an area near
Liege and would have been of particular benefit
to eastern Wallonia, where it was linked to the
,area's economic regeneration. The agreement was
warmly supported by Walloons in all three coali-
tion parties, but was never popular with the Flem-
ings. The predominantly Flemish Social Chris-
tians, under the leadership of Deputy Prime Min-
ister Tindernans, have been accused of scuttling
the plan by raising eleventh hour negotiating
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and resources. Since the next regularly scheduled
session of LCOSOC is still almost three months
away, all emergency session may be necessary to
maintain the niorntinturn of the proposal. Dutch
representatives In New York have urged their goy.
ernment to request a special ECOSOC session to
determine the UN's role in the energy crisis, The
Dutch Government, however, may favor a broad
meeting outside the UN framework, involving
producers, consumers, and developing countries.
Paris maintains there is no conflict between
its UN conference proposal anni the February 11
meeting of oil-consuming states in Washington.
The French have been concerned, however, that
the Washington meeting would offend the Arab
world. By promoting a world conference, Paris
hopes to placate the Arabs and strengthen the
French role vis-a-vis Washington in dealing with
the oil-producing states. Paris also may be seekln
to protect its freedom to make bilateral deals for
oil.
Other .consuming countries also see merit in
a global approach as a way to promote dialogue
with the producers and to assure that developing
countries have a say. Belgium, for example, re-
gards the UN forum es an opportunity to educate
developing c )undies on the relationship between
nigher oil prices and the decreased ability of West.
nrn countries to provide development aid. Lon?
don has been expressing interest in a broad con-
sumor-prorfucer meeting. EC Commission Presi-
dent Ortoli wants the community to include spe-
cific reference to the French proposal among the
common positions the EC will take at the Wash-
ington conference on February 11.
The French suggestion is likely to find sup-
port from at least some of the nonaligned coun-
tries, even though a global energy conference
could strain not aligned solidarity. r'!hilt. these
states have thus far given full support to Arab
diplomatic efforts, some of the lesser developed
na!?or,s--such as India-are severely threaten'd by
the oil shortage and high prices. Soviet represl'nta-
tives at the UN expect Moscow-which h,-,s not
suffered from any si nificant oil shortage-1D
oppose the conference
Page 19 WEEKLY REVIEW
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controversy and back to mote trad;tional issues,
In the interim, the outgoing Leburton govern.
men( will act in a caretaker capacity.
US interests will not be directly affected by
the government's fall, although the probably
will be a further delay in reaching h decision on
selecting fighter aircraft to replace the Belgian Air
Force'. aging F-104s. The Belgian aircraft pur-
chases are linked to those of the Dutci; -?the two
countries are considering a joint purchase of
either American or French planes-and possibly
to those of Norway and Denmark. Belgium was
said to be giving serious consideration to the
Mirage, and an early decision for the French plane
might have Influenced the other NATO countries
to opt for the Mirage.
Delay may work to the advantage of the
American aircraft industry. Bias for the Mirage is
riding high, and the US companies need time to
got their fighters into production-one of tho.
Mirage's strong points is that it is flying now-and
FRANCE PROPOSES ENERGY TALKS AT UN
Paris formally proposed to UN Secrolary
General Waldheim last wnr?k that a world togiqy
conference be held under UN auspices. Waldheim,
who is always interested in expanding Ut activi-
ties, is likelrr to enlarge as much as possible on
France's suggestion. Even before receiving the let-
ter, he had called for a global approach to the
energy problem and had established a study group
in the Secretariat to review the situation.
According to Quai UN Director Lcprette,
the French letter emphasized the magnitude and
urgency of the problem but did not suggest a
specific time or procedure. The General Assem-
bly's Economic and Social Council (ECOSOC)
would be the most likely forum for such a confer-
ence. Waldheim has focused his suggestions on
ECOSOC, and its wide mandate would be consist
ent with France's dmire for the conference, to
look beyond the immediate concerns of oil and
give consideration to all forms of energy needs
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Moscow's token retaliation for the expulsion
of three Soviet diplomats and their wives front
Peking M.A. week indicates that the USSR does
not want to risk a further deterioration of Sino
Soviet relations, The language of the Soviet Pro-
test and the expulsion of only one Chinese diplo-
mat reveal that Moscow would like the episode to
fade quickly, A Soviet ! oreign Ministry official
has even said privately that Moscow is preparing
to return its chief negotiator to the border talks
at Peking after an absence of more than sir
months,
The imbroglio began on January 15 when
the Chinese arrested the Soviet diplomats,
charged them with espionage, and put them on a
plane for Moscow four days later. They were not
permitted to contact the Soviet Embassy during
this period. On January 16, police in Peking were
still stopping traffic near one of the diplomatic
compounds in a search for "Soviet revisionists."
Moscow's protest note, delivered on January 21,
claimed that the five Soviets were subjected to
"barbaric treatment" and charged that the in-
cident was a "carefully planned hostile act against
the USSR." The note also said, however, that
further consequences of the affair would rest with
China, suggesting that no further actions against
Peking are currently contemplated.
In view of the recent transfer of military
commanders in China and the return of former
party secretary general Tong Hsiao?ping to the
Politburo, it is likely that the Soviets had stepped
up their intelligence gathering activities in Peking,
If the incident was merely trumped up, it may be
fart of Peking's effort to focus popular attention
on the alleged "threat from the north," a par?
sistent propaganda theme s' re the Chinese party
congress in August. In it ; event, the Soviet
response was minimal; the Ch rif5e dir,lomat ex-
palled in retaliation, nor example, was already all
route to Peking, having completed a six-year to
in Moscow.
This Soviet restraint comes as no surprise.
Even during the worst excesses of China's Cul?
tural Revolution, particularly the two-week siege
of the Soviet Embassy in 1967. Moscow resolved
to hold on in Peking as long as it could. Now that
the Soviets are trying to project an image of
accommodation and ,ood will toward China, they
are evidently determined to contribute as little as
possible to the Sino?Soviet polemic.
Another possible reason for Moscow's
restraint may rest in its current effort to organiia
an international communist conference. Several
prominent Communist parties are already op.
posed to such a conference an the grounds that it
would be no more than a Soviet forum for institu-
tionaliziog the Sino?Soviot dispute. A further
deterioration of the dispute would give additional 25X1
parties-particularly in Asia-ample reason to
boycott any communist meeting.
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YUGOSLAVIA
Belgrade's raaliza,.on that its all-out support
of the Arab cause has not paid the expected
dividends is already prompting it to review its
foreign policy and economic planning in order to
soften the impact of the energy crisis in Yugo.
slavia.
Tito's policy of close relations with the third
world stems largely from his belief that coopera-
tion among the raw material - producing states
should benefit all the nonaligned countries. At
the Algiers nonaligned summit last September,
and during the Arab-Israeli war, Belgrade stressed
the economic power concentrated in the hands of
its Arab allies. Recent dovo'opments in Arab oil
policy, however, have begun to affect Yugosla-
via's own gconomic viability despite Belgrade's
nonaligned c:!dontiais.
At the end of the Middle East war, the
Yugoslavs touted their just-concluded contracts
with Algeria, Libya, Iraq, and Iran as ensuring
adequate oil supplies. Oil prices soon began to
ascalate, however, and now threaten to cut Bel-
g.~ado's hard-currency reserves. The Yugoslavs can
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 Algiers summit last September. Belgrade',; :ocont
strong support of the Arabs was In large part
dictated by a desire to reassert its Influence with
the Arab contingent In the nonaligned movement.
The failure of this of fort induced Belgrade to seek
the support of nonaligned Asian countries, who
also believe the Arabs are using the movement for
their own ends,
Belgrade is particularly frustrated by
Algeria's postponement of a meeting of non-
aligned foreign ministers. The ostensible reason
for holding a session is to coordinate support for
the Arabs at the Geneva peace talks. In addition,
the Yugoslavs, and others, hope to use such a
gathering to persuade the Arabs to be more forth-
coming on Important issues-such as oil export
prices-that negatively affect other members of
the movomont.
The Yugoslavs and Indians do agree that the
Algerians too frequently act without consulting
the bureau sot up at the Algiers summit to
coordinate policy between meetings. India is an
active participant In bureau meetings and, like
Yugoslavia, wants the bureau to function effec-
tively and to be a restraining influence on the
Algerians. If Tito can achieve a meeting of minds
in Now Delhi, he may try to recover some of the
prestige of nonalignment's founding members.
The Indians, however, are reluctant to assume an
aggressive stance on political issues and will prob-
ably leave any initiatives to Belgrade.
Following his talks with Mrs. Gandhi, the
Yugoslav President will go on to Nepal, which
also has a seat on the nonaligned coordination
bureau, and to Bangladesh. Although Tito wil,
probably discuss the bureau with his hosts in
Nepal, these stopovers appear to be more
ceremonial than substantive.
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III afford the estimated $1 billion cost of its 1974
oil needs. A senior foreign trade official in
Belgrade recently grumbled that the contracts
"wore not as good as they appeared to be," Other
economic functionaries are openly warning of
100-percent price hikes for some petroleum pro-
ducts and resultant slowdowns for some indus-
tries,
The oil crisis is also posing difficulties for
foreign policy planners. A Yugoslav diplomat in
Washington has complained to a Western col-
league that his country fears "isolation" in any
international oil talks that take place outside the
UN. As an oil-consuming country that backed the
Arab use of oil as a weapon, Yugoslavia has an
interest in both sides of the consumor-producor
confrontation, but has little leverage with either.
Meanwhile, Tito will uto his current visit to
India, Nepal, and Bangladesh to discuss non-
aligned strategies. The Yugoslavs and Indians-
both charter members of the nonaligned club-
face similar problems in that their influence in the
movement has visibly slipped. Tito will seek Asian
support as a balance to the Arabs, who, with
African support, are now the dominant power
bloc among the no.'aligned.
Yugoslav loaders are particularly unhappy
about the increased power that Algerian President
Boumedione-tho official head of the move-
ment-has :violded since his successes at the
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TUNISIA-LIBYA: MARKING TIME
Tunisian President Bourguiba departed for
Geneva on January 19 for a medical checkup and
several weeks of rest, leaving behind the recent
merger fiasco with Libya. In his absence, Prime
Minister Nouira, Nouira's deputy, and the interior
minister-all opponents of the plan-will be the
key leaders. They will continue to pay lip-service
to the idea of union with Libya as they proceed
with delayinr, tactics designed to let down gently
both President Qadhafi and those Tunisians who
favor union.
Nouira has already launched a public cam-
paign that stresses the need for a step-by-step
fulfillment of the numerous pre-conditions for
unity that his government set forth last week.
Nouira's sttempt to convey the impression that
Tunisia still supports the union reflects the
apparent government position that Bourguiba's
agreement to the union should not be publicly
rescinded.
Although Tunisian authorities are still con-
cerned about adverse reactions from domestic
pro-union groups, there have been no significant
disturbances. Students and workerr; whose expec-
tations of new job opportunities in Libya have
been dashed, however, are believed to be sharply
disappointed.
The union affair has intensified the long-
standing political rivalry between Prime Minister
Nouira and the recently dismissed foreign min-
ister, Mohamed Masmoudi. Nouira played a key
role in convincing Bourguiba to back away from
the merger, which Masmoudi and Qadhafi
apparently worked together to arrange. The fiasco
has dealt at least a short-ten, setback to Mas-
moudi, but he remains on the political bureau of
the ruling Destourian Socialist Party and is
making efforts to preserve his -position.
There still has been no official comment
from Libya since Tunisia began to back away
from the union agreement. The nationwide
referendum-griginally scheduled for last week-
was canceled by Tripoli without explanation, in
an apparent effort to avoid further political
embarrassment. Libyan media continue to give
low-key coverage to the unity scheme, but no
mention has been made of joint preparations or a
future referendum date. Never enthusiastic about
the merger, the Libyan public has quietly
accepted the entire affair, which many apparently
view as one more of Qadhafi's earnest but fruit-
less efforts to promote Arab unity.
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Victory in Uttar Pradesh seemed assured-
until the Maharashtra debacle demonstrated the
depth of public disenchantment with the Ruling
Congress. The party's electoral prospects are
further threatened by two particularly disgruntled
groups in Uttar Pradesh, the untouchables and the
Muslims. Either group or both may withhold their
customary support on the grounds that the gov-
ernment has not provided adequate safeguards
against discrimination by caste Hindus.
At this time, Mrs. Gandhi still remains u,-?
challenged as a national leader. Her government
does not face re-election until 1976, and :as yet
there are no indications that a viable alternative
to her party and its programs is in the making.
Nevertheless, it is clear that the Prime Minister's
image has been tarnished and that a more ef-
fective performance by her administration will be
required if she is to escape more serious political
consequences.
As Indian farmers harvested a bumper rice
crop last fall, it appeared that better days lay
ahead for Prime Minister Gandhi. It is evident
now, however, that India's continuing economic
problems, recently aggravated by the oil shortage,
have increased popular discontent with her
party's rule.
Earlier this month, the Ruling Congress
Party was shaken by four by-election defeats in
Maharashtra State, heretofore a party stronghold.
Coupled with a wave of anti-government dem-
onstrations in many areas, these defeats have
party leaders worried about what may be in store
next month when four states and a union terri-
tory elect new legislatures.
The swell of popular discontent and the re-
sulting swing against her party have probably
come as a shock to Mrs. Gandhi and her sup-
porters. The fall harvest had been expected to
alleviate the serious food shortages that followed
the weak monsoon of 1972. Many farmers, how-
ever, have refused to sell their crops to the gov-
ernment for re-sale in "fair-price" shops and are
either hoarding or selling on the open market
where they can get higher prices. Food at con-
trolled prices thus remains scarce. Other essential
commodities, such as kerosene and cooking oil.,
have also become increasingly hard to obtain, anu
-the government has raised gasoline prices 70 per-
cent in order to reduce consumpi ion.
The most important of the five approaching
elections is in the north-central state of Uttar
Pradesh. With a population of 90 million, it is
'India's largest state and is Mrs. Gandhi's home
base. Since its last legislative election in 1969, the
'-tate has been run by a series of shaky admin-
istrations with interludes of direct rule from New
Delhi. The Prime Minister is going all out to win
this. one, beginning with her installation last
November of an interim government controlled
by the Ruling Congress party. She has also pro-
vided ample food stocks and a multitude of cen-
trally funded development projects, and is making
numerous personal appearances.
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citizens working abroad, earnings from shipping
and tourism, and by capital inflows. As a result of
the energy crisis, however, these receipts are
likely to stagnate or decline this year. An
economic recession in Western Europe, partic-
ularly in West Germany, could reduce worker
remittances substantially below the nearly $600
million recorded in 1972. In West Germany,
where 270,000 Greek workers remit nearly $300
million annually, officials are no longer issuing
new permits to workers from non-EC countries.
Should Europe suffer a serious recession, nearly
200,000 Greeks might have to be repatriated,
resulting in a serious labor surplus in Greece.
Earnings from tourism will grow more
slowly in 1974, as rapidly increasing prices have
reduce-! the cost advantages of vacationing in
Greece. The impact of oil price rises and supply
problems on the cost and availability of inter-
national travel, as well as sagging incomes in
countries experiencing economic slowdown, will
also cut into tourism.
The aura of political instability created by
the coup also will discourage investment. Much
foreign investment in Greece has been based on
the potential profitability of combining cheap
local labor with preferential access to the EC
market. But in 1973, the government permitted
wages, under pressure from pr'sces, to climb by
about 20 percent. Substantial wage hikes this year
are inevitable, further cutting the cost advantage
for industrial investment in the country.
The bleak forecast for the economy will do
nothing to aid the regime's efforts to create a
"new" Greece. Economic stresses at the consumer
level are bound to be blamed on the government,
as consumers make adverse comparisons between
the present and preceding regimes. Public dis-
satisfaction will probably be muted-at least for
the short run-because of press censorship and the
harsh penalties that the government has been
meting out to critics of its policief.
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GREECE BESET BY ECONOMIC WOES
One of the legacies of the ousted Papa-
dopoulos regime was a developing economic
crisis. Soaring inflation and a deteriorating bal-
ance of payments are being aggravated by sharp
rises in wages and import prices-most notably for
oil-and by a too rapid expansion of the money
supply. Wholesale prices increased by nearly 50
percent last year, cutting deeply into workers'
real income.
The trade deficit rose to $1.8 billion
for the first nine months of 1973, compared with
$1 billion in the corresponding period of 1972;
the over-all payments balance dropped by nearly
$400 million. The regime will find it difficult to
redress the trade imbalance because Greece
imports the major portion of the machinery and
raw materials needed by its industries as well as
all of its crude oil. These commodities, for which
there is little possibility of substituting domesti-
cally produced goods, constitute nearly 60 per-
cent of Greece's import , bill. Because of the
seriousness of the trade deficit, the government
reportedly is considering an austerity program
that would force cutbacks in public investment
and reduced imports of foodstuffs and non-
essential consumer goods.
In recent years, Greece's large trade deficit
has been covered by remittances from Greek
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HAVANA PETROLEUM REFINING AND STORAGE AREA
flu
pit '%A *
'*I DISTILLATION COLUMN
CUBA: EXPANDING THE OIL INDUSTRY
Overhead photography of large-x.al" (un?
struction activil,' indicates that Ctrh;r', tWc, nr,r)crr
i refineries will iiicreaso their indu;tr\''s capacity to
an estimated 125,000 harrel', per clay. A
40-percent expansion of the Havana refinery th?
%, island's largest---appears to he nearly cornirlete,
although the new facilities are not vet In uper,,-
tion. The smaller Santiago clr' Cu ha refinery is
being doubled to about 36.000 b/d, bt:t colt-
pletion is still at least six months away. Increased
s',orage facilities at both sites are either complete
or being worked on.
The new expansion was probihly under-
taken to help Cuba meet its crruv,'ing requirements
for petroleum. Current annual consunilitiorr is
estimated at 6.5 million tons of crude and prod-
ucts, about 9S percent of which is now in11101 ted
and paid for by the USSR. The increased refining
capacity will enable Cub:, to produce a lurch
Iargor portion of its petroleum pruclucis dcrn,, sti?
.- cally----alheit with imported crude---and thereb
products.
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ARGENTINA: TERRORISTS SET BACK
President Peron'-, dramatic call for a national
mobilization to destroy terrorism has, at least
temporarily, united a large part of the fractious
Argentine community behind him and isolated his
opponents.
The audacious and bloody attack by Marx,tit
guerrillas on a Military garrison last weekend has
resulted in near universal shock and outrage, even
in a society inured to growing violence. The raid
also was a tactical disaster, and the terrorists are
publicly admitting it. I )though there are conflict.
Ing reports, as many as 20 terrorists may have
been killeo, and hundreds of suspected extremists
are being rounded up in large-scale police opera.
tions.
Military leaders seem reassured by Peron's
tough response. Although their role in the coun?
ter-terrorist drive is still not clear, most officers
see recent developments as a watershed that will
mark the end of Peron's policy of restraint to.
ward the extremist groups. The President's blast
against unidentified provincial authorities for
being soft on leftists-a clear move to force the
ouster of administrators who are out of step with
his policies-was' particularly welcomed by the
military.
The left-leaning governor of Buenos Aires
Province, where the guerrilla incident occurred.
was forced to resign, and there are press reports
that the province will be taken over by central
government officials. Similarly, the governor and
leftist labor leaders in Cordoba Province are under
fire and will, at least for a while, be more cautious
in their opposition to the policies of the federal
government.
The left-wino youth of the Peronist Move-
ment rave denounced the terrorists' actions but
they have also condemned as "repressive" the
draft laws now before Congress aimed at tighten-
ing anti-terrorist legislation. While they may con-
tinue demonstrating against the laws, their posi-
tion has been weakened and the legislation will
undoubtedly be promulgated soon.
Although recent events clearly have pre=
sented Peron with d unique ouportunity to strike
a hard blow at the terrorists, there are clangers
inherent In the situation, Heavy-handed actions in
political purges of his movement or in security
operations would soon undercut the psychologi?
cal advantage he now holds and would drive the
Petonist left wing into the extremist camp, Cu
the other hand, the military could quickly be-
come disenchanted it Peron does not foll?rw up
BOLIVIA: BANZER'S PROBLEMS
Bolivian security forces are on alert follow-
ing scattered demonstrations and strikes protest-
ing official price increases of several basic food
:terns. The government raised r'ornestic prices by
as much as 100 percent e. ely this week in in
of tort to discourage the smuggling of scarce com-
modities, especially wheat, to external black mar?
lots.
A number of labor groups, including the
volatile mine workers, initiated walkouts of 24 to
36 hours duration on January 22. Seri .is con=
frontations have been avoided thus for. and no
strong 'dcrs have arisen among the strikers to
make th.. -;tuation more troublesome.
The atmosphere Is expected to remain tense,
however, for at least a week. If the strikes are
prolonged, Banzer will be in serious trouble.
Even before the price hike, the US Embassy
reported that at least one demonstration by
workers against food shortages and costs was
broken up by police. Embassy observers also
noted that the lack of meat, sugar, and cooking
oil had become a "principal topic of conversa.
tion," and that there were long lines of shoppers
at stores all over La Paz.
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Jan 25, 74
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the shortages and inflated prices come at a
tittle when Uante-. can ill afford a new political
challenge, Many of his former supporters-bath in
the military and in the two main political par.
ties-have gone into sortie form of opposition,
The f'tesiifent recently exiled fotttler president
Victor flat Lstenssoto, the nation's most pres'
tigious political figure, who was accused of ac?
lively plotting against the government. Now in
Argentina. Pat is seeking to forge an alliance with
other prominent Bolivian exiles to overthrow
Costa Ricans will go to the polls on Febru.
ary 3 to choose- a president for the nnxt four
years. Voters are exhibiting little enthusiasm for
the contest, a factor that may work to the advan-
tage of the governing National Liberation Party's
presidential candidate, Daniel Oduber. He must
will a plurality of 40 percent in the eight-candi-
date rare or lace a run-off in April. Oduber's
strategists, after some initial doubts, are confident
of victory on the first ballot.
The candidates, especially Oduber and his
chief opponent on the r_.nnwrvative National Uni?
lication ticket, Fernando Trejos, are not the col-
orful figures to which Costa Rican voters have
become accustomed. For the first time in 30
years, neither of the two principal political adver-
saries, whose supporters fought a civil war in
1948, is participating in the campaign. One is
dead, and the other, the usually irrepressible Pres-
ident Jose Figueres, is remaining above the battle,
obeying the coistitutional injunction against par-
tisan activity.
Rulings by the Supreme Electoral Tribunal
have also dampened enthusiasm. They have, for
the most part, stopped the extra-legal tactics and
mud-slinging of past campaigns. Even the news-
papers, fearing that they will be fined, have re-
fused to accept paid political ads that they con-
sider offens. e.
Oduber leas pursued an intellectual all,
ptoach, dryly describing the nation's probletns
and explaining how he and his party propose to
cope with them. Ile has divorced himself a; much
as possible from the f`igueres administration and
its vulnerability to charges of corruption avid inef-
ficiency, but without openly breaking with the
President and thus losing the large block of votes
he controls.
Fernando Irejos is even mote bland than
Odubet. Lven though there is an arsenal of poten
tially damaging charges available to use against
the administration, he has chosen to ignore such
issues. In anticipation of a possible runoff elec-
tion, however, he has been even more gentle with
the minor candidates.
Of the lesser candidates, only two stand a
chance of winning even 10 to 15 percent of the
votes: Rodrigo Carazo, who heads the ticket of a
splinter of the governing party, and Jorge Core
Met Marten of the rirht-wing National Independ.
ent Party. Although more strident than the two
top contenders, neither Carazo nor Gonzalez has
generated much appeal among the uncommitted.
The extreme left seems to be doing even more
poorly.
The only note of color in the campaign has
been provided by a fringe candidate, Gerardo
Villalobos, whose antics have delighted-though
not persuaded-the electorate. He has parachuted
from airplanes, wrestled with the Central Ameri-
can champion, and ridden a donkey to publicize
the energy crisis. Although Villalobos probably
will not poll many votes, in ,t recent television
interview he was watched by 70 percent of the
viewing public, an indication of the public',;
hunger for a candidate with some flair.
ThG uncommitted voters, many of them
newly enfranchised 18-year-olds, could be a de-
ciding factor in the election, providing the margin
Oduber needs to win on the first ballot. The
campaign may liven up somewhat in the remain-
ing few days but. barring very unusual circum-
stances, the Costa Rican tradition of peaceful and
honest elections will continue.
Page 28 WEEKLY REVIEW
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